“We need to raise the profile of our business in the minds of people who may not know they can find well-paying careers as service professionals in our dealerships.” –Gary Gibson, president of Tri-State Sterling Trucks in Cincinnati, Ohio.

Ryan DeLaRoi cut his teeth working on diesel engines under rather hazardous conditions: on deployment in Iraq. During his second tour in the war zone, DeLaRoi – a Corporal in the U.S. Marine Corp – repaired Humvees and other diesel-powered vehicles: sometimes in the face of sandstorms and far-deadlier bullets.

But after nearly 10 years, the Marines discharged DeLaRoi due to knee and back injuries sustained during his military service. He decided to attend the diesel mechanics program at Western Iowa Technical Institute (WIT) to enhance his technician skills gained on the battlefield, participating in a veterans-civilian workforce transition program, which helped pay for his tuition and the tools he needed for his trade.

(Once a Marine, always a Marine is how the saying goes … but Ryan now works on civilian trucks to make a living.)

When he heard the local Peterbilt dealership in Sioux City, Iowa, was always looking for a few good technicians, DeLaRoi stopped by for a visit with its service manager, Harland Gylfe, and the 32-year-old quickly found himself – despite his minor disabilities – maintaining and repairing heavy-duty trucks for a living after graduating from WIT in December 2007.

“The working conditions are great, especially compared to working on Humvees in Iraq,” he said. “Most of my military equipment repairs were done outdoors and it was hard to keep the parts clean. Sometimes, a vehicle would break down on patrol and there was a chance I would get shot at while fixing it. This happened several times.”

Another disadvantage for war zone mechanics is the lack of power tools, which is why DeLaRoi appreciates the equipment he gets to use at the Sioux City Peterbilt dealership. “It’s a lot better working conditions and less strain on my knee brace and back,” he said.

One reason DeLaRoi works as a heavy-duty truck technician today is that Sioux City’s Gylfe is active on WIT’s diesel mechanics advisory committee and hired DeLaRoi to work part-time on the evening shift while attending school.

“I find veterans make good workers; they’re experienced, dedicated, dependable and have a strong work ethic. Ryan is another good example of a vet’s transition to a skilled civilian worker,” Gylfe said. “He is doing a good job servicing diesel trucks and learning to do more types of maintenance and repair tasks.”

(Finding enough technicians to handle the maintenance and repair needs of the trucking industry is going to be a challenge for dealerships and fleets alike.)

Gylfe has hired many military veterans for Peterbilt’s service department over the years as he continues to seek new pools of recruits to fill out the technician ranks at his facility. And it’s this struggle – finding an adequate supply of techs – that he shares with much of the heavy-duty truck dealership community in the U.S. these days.

“We need to recruit qualified dealership employees, especially truck technicians, to protect the industry’s long-term viability,” said Gary Gibson, president of Tri-State Sterling Trucks and the new chairman of the American Truck Dealers (ATD) division of the National Automobile Dealers Association (NADA) during the 45th annual ATD Convention & Expo in Dallas, Texas, earlier this year. “Dealers will have their hands full as they attempt to operate profitably during these difficult times.”

George Grask, the outgoing chairman of ATD, called on dealers to take steps to protect the viability of dealerships during challenging times. “Whether it’s the service we provide, the parts we sell, the hours we keep – we need to continue to evolve to meet the needs of our customers … to offer the very best customer service and support,” he said.

In addition to first-rate customer service, Grask – owner of Cedar Rapids Truck Center, Cedar Rapids, Iowa – emphasized the need for dealers to keep pace with the newest technology, including proprietary engines, hybrid technology and telematics. He also called on truck dealers to continue to educate themselves on the management and leadership qualities required to run increasingly complex businesses.

(Technicians are essential — which is why a sufficient populations is critical to the trucking industry’s future.)

“The fact is our business is essential,” he stressed. “Nothing happens until a truck delivers it. In the U.S., trucks and truck dealers will continue to be a necessary and vital part of the economy.”

This is oh so true. But finding the technicians necessary to keep those trucks rolling is going to become and bigger and bigger challenge for dealerships in the months and years ahead.

“Leaders learn by leading, and they learn best by leading in the face of obstacles. As weather shapes mountains, problems shape leaders.” –Warren Bennis

You’re going to hear a lot about benchmarking in the days ahead – how to benchmark the price you pay for fuel against others fleets, truck stops, etc.; how to benchmark your overall fleets costs against industry averages; how to benchmark your customer service levels; and so on and so forth.

Bernchmarking is a tool that goes in and out of vogue in American business, but it’s also one that is becoming more critical for fleets today as they seek to gain much tighter control of costs. As Jim Angel, director of business development for T-Chek Systems, said here at the National Private Truck Council meeting here in Cincinnati this week, it’s all about the pennies: what can two cents saved per gallon or per mile per truck add up to over a year’s time. The answer is a LOT; so fleets need to look for every penny of savings they can.

As usual, Professor Jerry Osteryoung at the college of business at Florida State University has some thoughts on this topic, so I am going to turn the stage over to him today. Professor Osteryoung, the floor is yours:

“One thing every firm needs to have in place is a system to measure their performance against an industry average or some other criteria. Benchmarking is one such way to compare your firm’s performance against others to get an idea of how you are doing. In addition to sales growth rates, you may benchmark against advertising expenses as a percent of sales, debt to total asset ratios, gross profit margins and net profit margins, as well as a number of other operating and financial figures.

When it comes to measuring how well your firm is doing, you just cannot compare past performance with the current year’s performance in isolation of what other firms are doing. One of the firms we were helping thought that their 6% growth in sales from last year was evidence of how well they were doing. However, as the industry average for the same period was 12%, it was clear that they were not doing nearly as well as they thought there were.

A restaurant that we are working with had a cost of food percentage (food costs divided by sales) of 56%. The owner thought he was doing ok, but the typical benchmark for restaurant food costs is right around 30%. The owner did not really understand how far off his food costs were, as he had no basis of comparison.

After working with him and showing him these numbers, this restaurant owner was able to reduce his food costs to 35% with more reductions to go – all within a period of one year. Additionally, his net profit margin went from almost zero to 10%, and his dollars of profit skyrocketed. For this entrepreneur, the reduction in food costs was easy once he had a goal in mind, and that is exactly what benchmarking can do for you.

It is important to bear in mind, however, that with most numbers, you cannot take an industry average or benchmark as a perfect goal or standard. Rather, benchmarks should be used as a guide, and you must use judgment to interpret what the results are really saying. For instance, in many cases, firms’ net incomes are much larger than the benchmark. However, this is frequently caused by the owners’ desire to take out distributions of profits rather than salaries.

There are a number of neat places that provide information about benchmarks. One such source is www.bizstats.com, which offers some of this information free of charge.

The source I consulted is Financial Research & Associates (FRA) who, for the last 23 years, have issued an annual book reporting firm benchmarks. Most of their data comes from accountants who produce financial statements for companies, and the figures are broken down enough to provide a good industry comparison and benchmarks. The cost for this book is around $140.

Another source I used is the RMA Annual Statement Studies. This database is much larger than the FRA, and the data comes from financial statements provided to commercial banks by accountants. It shows 16 “classic” financial ratios, each grouped by industry: current ratio, quick ratio, sales/receivables, cost of sales/inventory, cost of sales/payables, officers compensation and sales, gross and net profit margins, and more. This is a great data source providing a wealth of information, but the cost per year will run you about $500.

The bottom line is that there are many sources of financial information that can be used to benchmark your company’s performance. Every firm should utilize benchmarks in order to ensure that they are properly measuring how well they are doing.”

For more insight, you can always reach the good professor by e-mail at jerry.osteryoung@gmail.com or by phone at 850-644-3372.

“A business exists because the consumer is willing to pay you his money. You run a business to satisfy the consumer. That isn’t marketing. That goes way beyond marketing.” –Peter F. Drucker

You hear a lot about the importance of “brand names” in the market place – especially in terms of supporting the brand and what it stands for. Truckers are more than familiar with this concept because they are some of the most “brand loyal” customers you’ll ever fin. I mean, I’ve talked to countless fleets and owner-operators that stick with Peterbilt, Kenworth, International, Mack, Freightliner, Sterling, Western Star, Volvo, you name it, and wouldn’t switch truck brands unless you paid them.

(Of course, with the national average price of diesel fuel now at $4.21, they might be more easily swayed by a lot of greenbacks.)

Yet, seriously, while much of the brand loyalty in trucking comes from a certain mystique or character built up around each particular brand of road iron, a lot has to do with the dealerships and service behind each nameplate. Even when a trucker is considering switching brands for something lower prices or touted to get better fuel economy, the service he or she has received over the years gets factored into the decision.

I remember talking to veteran owner-operator Chuck Racine a while back as he shopped around for a new truck. For years he’d owned Kenworths, but found himself willing to consider different brands if he could get better fuel economy. In the end, however, his long-time relationship with his Kenworth dealer in Evansville, IN proved to be the tiebreaker. Their service over many years kept him loyal to the brand and put him behind the wheel of a new T660, one equipped with a 2007 emission-compliant engine to boot.

(That’s Chuck Racine on the right, in front of his old truck, talking with Billy Paxton, VP at Paxton Van Lines, Chuck’s employer.)

That’s why focusing on your own brand – whether you’re a fleet or owner-operator – is so important, almost like a “mantra” these days. (And “mantra” is a term from India meaning words or vibrations used as “spiritual conduits” to instill one-pointed concentration in the devotee. It originated from the Vedic religion of India, later becoming a fundamental part of both the Hindu and Buddhist religions.)

I’m going to let Professor Jerry Osteryoung from the college of business at Florida State University continue this line of thought, as he has some interesting points to share of the subject. Professor Osteryoung, as usual, the floor is yours:

“Branding is such an important element of marketing and the vision of the firm as it represents the promise to meet a customer’s needs. Branding is concept that covers so much more than marketing. As branding is such a critical element with any firm, I am going to write a series of articles on this very important concept. This is the first of these articles in the series branding dealing with brand promises. A brand promise is the just a set of expectations and guarantees that a company offers to its customers.

(Probably one of the most recognizable and premier brands in the world today is Walt Disney World.)

As Peter Drucker says, customers buy your products and services and you must satisfy the customer. Branding is the way a business satisfies the customer besides prices. Just look at Apple or Disney who have great brands that came from years of working and developing their own brand. Not only must brands bring customers in the door, but also once they are there they must deliver on their promise. What would happen if Disney had a dirty park?

It is so important to understand that a brand is not yours but it resides in the customers mind. That is for a brand and a brand promise to be successful; it must be always viewed from the viewpoint of the customer.

While a cute logo is okay, what really differentiates a brand is the brand promise. Just look at Coca Cola whose brand promise is ‘The Real Thing’ and how much they can charge for their brand over other non-branded drinks. Southwest Airlines has always had a brand promise related to price and FedEx’s brand is “peace of mind.” When FedEx started its brand promise was delivery by 10:30AM. It still has this delivery time as part of its core values but it has changed the brand to reflect changing values in our society.

With any brand promise it must be customer-centric. If it is not related to the customer, it just is not effective. Additionally, some brand promises have to create a new industry classification, just look at Red Bull. They knew that the cola and citrus market were saturated as well as sports drinks. Red Bull used as a brand promise to ‘revitalize body and mind.’ Just look at how this customer centered brand promise that clearly differentiates it from other industries. Disney’s brand promise is ‘family fun entertainment.’

Volvo car’s brand promise has always been ‘safety.’ I bought both of my kids a Volvo as I recognized this brand promise and it meant so much to my wife and me as it gave us piece of mind. Volvo is trying, however, to update this brand image for the 21st century.

(Vehicle testing being conducted at the Volvo Safety Centre in Sweden. Volvo cars, it should be noted, is now owned by Ford Motor Co.)

Bank of America’s brand promise is ‘The Bank of Opportunity.’ In order to get to this brand promise they analyzed the strengths in all of their businesses. While they used hard data to come up with this brand promise, there was so much that was not quantifiable. They had to use judgment, creativity and flexibility.”

Good points, I think, and one truckers of all shapes and sizes can use in their business. For in these tight times, every advantage you can gain with the customer – especially in terms of keeping them for the long haul at a good rate – is critical.

You can reach Professor Osteryoung by e-mail at jerry.osteryoung@gmail.com or by phone at 850-644-3372.

“Wise men read very sharply all of your private history in your look and gait and behavior.” –Ralph Waldo Emerson

Changing your behavior – especially as a manager in the trucking business – is no easy task. But it’s something many business experts say is vital, especially if a manager’s ingrained work habits are counterproductive. They also caution that to achieve change it must be done in small amounts over time and must occur in a positive manner, or the change won’t take permanent root.

Professor Jerry Osteryoung of the college of business at Florida State University has a good take on how behavior impacts business output in his work with entrepreneurs. So I’m going to let him give you his view on the subject. Professor Osteryoung, the floor is yours:

”Our behaviors are important aspects of how we function each and every day. For example, we do not have to think about brushing our teeth every day. We do it habitually as it is a very good behavior. However, not all behaviors are good. If one of our behaviors is coming in to work late, this is certainly not a good habit.

We were helping a very successful entrepreneur get through some rough industry and economic conditions. He was a fantastic salesperson, but he was spending most of his time doing the clerical work that was necessary to process all of the orders. After spending much time talking to him, we decided that he needed to spend much more time in the selling mode; however, he felt that every second he was selling – which he loved – something was not being done back at the office. He had developed the behavior that the clerical work had to be done before he could do any selling.

Changing someone’s behavior is not an easy task at all. Just ask my wife who has been trying to change certain behaviors of mine for close to 40 years without any success. Most people will only change their behavior in a crisis (which I can personally attest to) or if they are given a goal with very small, achievable steps. For example, if you want someone who has never exercised before to exercise 30 minutes a day, the best method is to give him or her a series of small steps. You could have this person do five minutes a day for a week, then increase it to ten minutes, and so on.

In the case of this entrepreneur, it was clear that in order to change his behavior, we had to devise a series of very small steps leading up to a big goal at the end. We suggested that he spend just two half days in the field selling, a plan that he admitted would not affect the way he processed orders. I told him that I wanted to follow up with him in a month.

At the time of our follow-up meeting, I told him what a terrific job he had done and that I was so proud of what he had achieved. I, also, told I knew that this very tough for him. During this meeting, I, also, increased the expectation by encouraging him to now spend three half days in the field and begin looking for someone else to process his orders. In subsequent meetings, he gradually spent more time out in the field and less time in the office.

I was trying to change a behavior that had grown to be habitual and was killing his business day by day. The entrepreneur followed my suggestions, and I can now report that he spends 80% of his time selling, and he has hired a part-time assistant. Not only is his business flourishing, but being free to do what he really likes and what he is really good at has made him a much happier man.”

“They’ve invested in hiring and training employees to serve the growing needs of today’s owner-operators and truck fleets.” –Mike Conroy, director of dealer network development at Peterbilt, on the award winning performance at Peterbilt of Sioux City

It’s a tough time to be selling trucks these days, no doubt about it. Class 8 sales fell nearly 47% last year, dropping to 150,965 units from 284,008 in 2006, according to Ward’s AutoInfoBank. Sales in the medium-duty Class 6 & 7 market fared only slightly better, contracting by 36,608 units or 22% to 220,128 units in 2007.

This year hasn’t been much better. Bill Jackson, general manager for Peterbilt Motors Co., for one, believes Class 8 sales in the U.S. should total 175,000 to 215,000 units for 2008, while medium-duty Class 5-7 sales should total between 80,000 to 95,000 units for the year.

With those statistics in mind, you’d think this would be a time for dealers to pull in their horns, ratchet back on costs across the board, probably delaying investments in their business until some form of light is visible at the end of the current economic tunnel we’re in. But that’s not always so.

Take Sioux City Truck Sales (SCTS) for example. Founded in 1954 by G. L. Wilson, SCTS operates three full-service Peterbilt dealerships serving Iowa, eastern Nebraska and southeastern South Dakota (in the cities of Sioux City, Des Moines and Council Bluffs, respectively) providing new and used truck sales plus all-makes parts and service. And they don’t just sell one kind of truck, either: SCTS offers a full-line of Peterbilt highway tractors, vocational and medium-duty delivery trucks.

(SCTS’s dealership in Sioux City, Iowa, which racked up several national awards for sales and customer satisfaction.)

As a family-owned business, SCTS is what I like to call “old school” in a good way: the biggest reason being how the company quickly gives credit for their success to their hard-working employees. That’s the basis of SCTS’s reputation and the reason they’ve managed to keep selling trucks and other services despite the current downturn.

“I believe our great success during 2007 was built on a combination of ingredients,” said Brad Wilson, the company’s CEO. “Our employees have a long history and good reputation of providing quality service to our customers. Now, our skilled workers have an excellent new facility through which they can more efficiently serve our customers.”

He’s talking about their now-finished effort to replace its 40-year-old building at the Sioux City dealership and construct a new $5 million facility, plus hire additional employees. The new building, which opened in fall of 2006, features an indoor vehicle inspection/diagnostics area and quick lube area, offers 16 service bays, a body shop completed with a frame correction and alignment center, 80-foot-long paint booth, two wash bays and stalls for working on seven trucks.

(The new interior at Peterbilt of Sioux City.)

“We invested in the new facility that allows us to provide a higher-level of service to even more customers,” Brad noted. “And our customers responded during 2007 with increased purchases in several categories.”

He also pointed out that his family’s Peterbilt of Sioux City location recently received the 2007 “Best in Class Dealer of the Year ” and the “TruckCare Dealer of the Year” awards from Peterbilt Motors Co. – and he gave all 60 employees working there a custom jacket in honor of their contribution toward earning these awards, something I think goes a long way to reinforcing esprit de corps in this industry.

Note, too, that his Sioux City dealership won the awards in competition against all other Peterbilt dealers in the U.S. and Canada – and that’s some pretty serious competition in anyone’s book.

“The ‘Best in Class’ award recognizes overall dealer performance, including the business side of the dealership – profitability, growth, business processes and financials,” said Mike Conroy, director of dealer network development at Peterbilt. “The Sioux City dealership demonstrated outstanding performance during 2007 in all of these business measurements,” noting that Sioux City’s market share of Class 8 trucks sales more than doubled Peterbilt’s national average during 2007.

The “TruckCare Dealer of the Year” award recognizes the dealership that achieved its parts, service and preventative-maintenance contract sales goals and provided the highest levels of customer satisfaction – an Sioux City received a perfect score of 100% for its roadside assistance call center response rate and a 99% customer satisfaction rating.

“The TruckCare award is a tribute to the employees in our service, body shop and parts departments for outstanding performance and growth in 2007,” said Wilson. “The sales volume for parts and service increased 29% and 23% respectively during their first year in the new building. This award honors the skills and dedication of our customer-focused employees.”

You don’t rack up numbers – or awards – like that without staying focused on the fundamentals in the trucking business, and those fundamentals are getting tougher all the time. It’s nice to see some very hard work get some high accolades as well.

(Displaying Sioux City Peterbilt’s awards are (left to right) Jeff Petersen, sales manager; CEO Brad Wilson; Rick Burkhart, parts manager; Jim Gard, warranty manager; Jerry Hesse, body shop manager; and Harland Gylfe, service manager.)

We have more information now than we can use, and less knowledge and understanding than we need. Indeed, we seem to collect information because we have the ability to do so, but we are so busy collecting it that we haven’t devised a means of using it. The true measure of any society is not what it knows but what it does with what it knows. –Warren Bennis

Are your drivers happy with their jobs? Angry? Indifferent? A lot of carriers don’t really know until the driver gets up and leaves – and by then, of course, it’s too late. That’s why creating some sort of channel for feedback might be a good way of giving them a chance to air their views non-combatively in order to figure out if there’s a way to change things.

Now, sure, employee surveys are considered by many to be a joke – and for good reason. Everyone is trying to put food on the table and pay the bills while getting miles driven and freight delivered, yet here comes another piece of paper to fill out. But if viewed properly, surveys can be a good way to sample the mood of your driver corps, if not the company as a whole – giving you a chance to address problems before people start voting with their feet.

Professor Jerry Osteryoung of the College of Business at Florida State University has some thoughts on the subject I’d like to share, and while his comments are broadly based, I think there are some good ideas fleets can draw upon for their own use. Professor Osteryoung, the floor is yours sir:

“I have seen so many cases where the culture of an organization changes dramatically because of new management, a new work environment or just complacency of management – all of which affect both turnover and morale. Probably, the biggest problem with the culture of an organization is just a lack of management knowledge of the employees’ real perceptions and feelings about the organization.

It is estimated that each time you lose a worker; it costs your firm 150% of their annual salary for retraining, rehiring and just reeducating a new employee. It is so very important to keep turnover low especially given the tightness of the forthcoming national labor shortage.

Employee surveys are effective in improving retention rates, increasing profitability, lowering absenteeism and just making your business a better place to work. Many firms are moving to employee surveys conducted on the web in order to evaluate employee perception of their work environment, as well as management effectiveness. These online surveys are very cost effective, especially when compared to the archaic approach of compiling surveys with hand written responses.

When surveying employees you need to make sure that the results remain anonymous. If workers think that they can be identified, participation and effectiveness decline dramatically. You need to guarantee each worker that their responses will remain anonymous, and you must make sure that each worker feels comfortable with the process of submitting their thoughts and feelings.

One of things that really helps raise the response rate is to notify your staff that the survey is coming. There are so many ways to do this. For example, you can post the information on bulletin boards in your business or include it emails to your staff. Some firms assign participants a specific time to complete the survey so that they can do so when they are free of other work duties. Additionally, many firms offer employees incentives, from restaurant gift certificates to cash. With these types of incentives, the response rate is frequently increased by 15% to 20%.

One of the best things that you can do is explain the purpose of the survey both in advance, as well as on the survey instrument itself. The purpose could be anything from gauging worker morale to evaluating the ability of the firm to accept change. Regardless of what the purpose is, it must be communicated many times to each survey participant.

Not only must you communicate the purpose of the survey, but you must also communicate how the results will be used. In one instance, they may be used to generate a plan of corrective action. However, whatever the case may be, the intended use of the results must be communicated very succinctly to your staff.

Once the survey is complete, you must also communicate the results and your plan of action. This must take place as soon as practical in order to prevent employees from thinking that their efforts just went into a black hole, never to be seen again.

The final piece of the survey process is a follow up survey. The follow up survey will help you evaluate how effectively your plan is producing the desired results. Normally, most surveys are done at least annually to keep track of these important issues.”

You can reach Professor Osteryoung by e-mail at jerry.osteryoung@gmail.com or by phone at 850-644-3372.

“Repetition builds continuity – continuity builds history – and history builds identity.” –Roshan Samtani

So, I’m down here in Louisville, Kentucky, getting ready for the mammoth Mid America Trucking Show. All the suppliers to the trucking industry – from manufacturers of big rigs, trailers, and engines, down to the smallest of components and pieces of chrome – are going to be lined up to show of their wares. It’s one of the biggest and boldest marketing performances these companies – large and small – put on every year, so it’s worth thinking about how to get the most bang for the marketing buck spent on such efforts.

For some insight on this topic, I am going to turn (yet again!) to Professor Jerry Osteryoung with the college of Business at Florida State University. He’s got some pretty interesting thoughts about how “repetition” is the key to building band identity in the marketplace – something suppliers and trucking firms themselves could put to good use. Professor Osteryoung, the floor is yours:

“We were working with an entrepreneur who owned a professional service business. He was trying to increase his revenues, which had been flat for the last three years, and his profits were falling as well. He had tried numerous ways of bringing in new customers, from targeted direct mail with post cards to TV advertising.

However, none of these methods had any effect. His sales remained flat and even began to decrease as he was harvesting very few new customers. When I asked him about his marketing plan, he said that he was trying to spend around 3% of his revenues. He said he did not have a marketing or advertising plan. Rather, he was looking for that one advertising medium that would produce the results he was looking for and turn his revenues and profits around. However, when it came to waiting for these results, he was very impatient. He was constantly switching from one form of advertising to another, looking for one that would bring in many new customers or the magic bullet.

It is very reasonable to expect results from advertising dollars; however, it takes repetition of a marketing message to get a potential customer to act based on the advertisement. In our busy, multi-tasking life, we are bombarded with information daily. Information overload is so common, and it is showing no sign of slowing down. Customers just will not act on any advertisement unless it is both unique and repetitive.

I know that when I get regular mail every day, I look for bills and personal notes and just trash most of the rest. I just do not have the time or the inclination to look at anything else, unless it grabs me at first sight.

Okay, so what does all this mean in relation to spending money on advertising? In order for advertising to produce results, a customer must see the ad five to seven times. Potential customers need to be frequently reminded about your firm and products. Just look at Nike and how they put their “swoosh” symbol everywhere, especially at athletic venues.

Repetition and unique advertising generates what I call “top of mind awareness.” It is this “top of mind awareness” that brings in new customers. If I am a plumber, I want my company’s name to be the first one a potential new customer thinks of. That way, they will call me when they need service. The only way to accomplish this “top of mind awareness” is through repetition of ads.

It always surprises me how many relatively small companies spend so much to advertise for thirty seconds during the Super Bowl, but are never seen advertising again. It would make so much more marketing sense for these firms to advertise more frequently with their unique message.

That’s the key: making sure that your advertising is both repetitive and unique, and that in turn, you are getting the maximum out of every advertising dollar.”

As always, you can reach Professor Osteryoung by e-mail at jostery@comcast.net or by phone at 850-644-3372. All of Dr. Osteryoung’s articles, by the way, can be found in a searchable form at www.cob.fsu.edu/jmi.

“There is an old joke among economists that states: A recession is when your neighbor loses his job. A depression is when you lose your job.” –Anonymous

OK, OK – I’ve already been taken to task for using the “R-word” in this space when, technically at least, the U.S. isn’t in a recession (defined as a decline the U.S. gross national product or “GNP” for two consecutive quarters). And I’ve also been told rather bluntly that continuing to use the “R-word” can become a self-fulfilling prophecy of sorts.

All that aside, it’s pretty hard to ignore the economic troubles bombarding the U.S. right now — from paying $100-plus for a barrel of oil, a meltdown in the housing market coupled to a total collapse in the value of mortgage-back securities. Just look at the fate of the venerable 85-year old investment bank Bear Sterns: worth $20 billion in January this year (a scant 10 weeks ago), J.P. Morgan bought it lock, stock, and barrel for a mere $236 million this week, with the Federal Reserve guaranteeing the value of Bear Stern’s mortgage-back ed securities holdings in the bargain.

Yet the fate of Bear Sterns also shows the flip side of a downward economic slurge – those that have husbanded their capital can reap some big rewards. Call it “vulture capitalism” if you like, but J.P, Morgan just got one heck of a deal – and many other businesses, even in trucking, may be in a position to make some similar gains if they play their cards carefully.

As usual, Professor Jerry Osteryoung of the college of business at Florida State University has some thoughts on this subject. So I am going to lay off digging my own hole on this sensitive topic to let him fill it back in for me. Professor Osteryoung, the floor is yours:

“With the economy slowing down and probably moving into a recession, you must take caution as sales for most firms are going to be reduced. However, a number of positive opportunities that were not available before will be coming out of this recession as well.

The number one positive by-product of this recession is that loan rates are falling dramatically. Now is the time to look into refinancing all of your assets. Whether you have short-term or long-term debt, now is the time to secure a much lower rate. Look at all your assets, from car financing to building mortgages, and consider refinancing them. Just a 2% decline in rates on a 15-year loan of $100,000 will save you about $100 a month or $18,000 over the entire loan period.

Another thing to consider in this economy is buying a building for your business. With both property values and interest rates falling, the real estate market for commercial property is getting softer. It is almost as if this is the perfect storm (in a good way) to buy commercial property. We just may not see this type of buying opportunity again for many decades. Additionally, you may be able to afford a much larger building now that these two elements are being driven down.

Many firms are too heavily leveraged with debt to survive the falling sales of a recession. This is another perfect opportunity to step up and acquire some of these firms to gain market share at a very reasonable price. There will also be more business bankruptcies, which presents yet another chance to acquire some very inexpensive assets. Normally at a business liquidation auction, the average price is ten cents for every dollar of cost.

Another function of a slowing economy is that firms often let good employees go, as they can no longer afford the overhead. Consequently, if you can afford it, this is a perfect time to bring on some great new employees that would otherwise be unavailable. This labor surplus will last mainly during this year, however. Once the economy starts to improve around the middle of 2009, you can expect the labor supply to be very tight for the next five years.

Finally, the last thing that you can do is look at every vendor contract to see if you can negotiate better prices. Like you, most of your vendors are seeing their sales slow and will want to maintain their customers at almost any cost. If they have to choose between a price reduction and losing you as a customer, they are going to give you the price reduction – so long as it is within reason.

While sales and profits will be negatively affected, recessions present a number of business opportunities, from property acquisitions to price reductions. The key is to go out and find these opportunities, then take advantage of them.”

Good advice, as always, from someone who’s been there and done that over the course of his career listening to and teaching a wide variety of business entrepreneurs.

You can reach Professor Jerry Osteryoung by e-mail at jostery@comcast.net or by phone at 850-644-3372. All of Dr. Osteryoung’s articles, by the way, can be found in a searchable form at www.cob.fsu.edu/jmi.

“The great virtue of free enterprise is that it forces existing businesses to meet the test of the market continuously, to produce products that meet consumer demands at lowest cost, or else be driven from the market. It is a profit-and-loss system.” –Milton Friedman

There’s no question that the trucking industry is served by many top-notch suppliers of everything from new trucks and aftermarket parts to engine oil and maintenance services. That’s been my experience covering this industry and it’s all the more remarkable because trucking is such a tight-margin business, with 5% to 7% profit margins the norm for many fleets out there – numbers that usually aren’t attractive to the best suppliers in the market.

Yet the reverse is also true; that there also suppliers that exasperate fleets to no end, with customer poor service probably the top issue. Professor Jerry Osteryoung from the college of business at Florida State University is very aware of how much trouble suppliers like these can cause, especially for the entrepreneurs he works with. Truckers, like many entrepreneurs, recognize the value of customer service and how critical it is as a competitive advantage in the marketplace. That’s why is can be a real problem on more than one level if their suppliers don’t follow the same playbook.

So, as usual, I’m going to give Professor Osteryoung some space here to detail his thoughts on the subject of difficult suppliers, as he’s had a lot more experience with this issue than I have. Professor Osteryoung, the floor is yours:

“Suppliers allow you to function as a business and provide products and services to your customers. They determine the cost, as well as the availability, of your products and services. In so many ways, suppliers are the lifeblood of your business. They are clearly indispensable … and that means you will probably have to deal with at least one difficult supplier at some point during your business’s life.

We were helping one entrepreneur deal with an incredibly difficult vendor. Compared to the firm’s other suppliers, this vendor had the highest cost, but it was the industry leader, with a name that was considered the flagship of the industry. This vendor did everything possible to avoid being supportive of this business, from not returning phone calls to charging for each and every sales brochures that was designed for the ultimate customer (including their catalogs, which listed the product description and the wholesale price of each and every product).

Because of the supplier’s position in the industry, the firm thought that they had no choice but to keep this vendor on. They thought that they absolutely needed the vendor’s name to lend credibility to their business. While they tried to negotiate a better relationship and terms with this vendor, the vendor just was not interested, as they believed that they were the ‘elephant’ in the market.

I was able to work with this firm and show them that, while the vendor had a significant market share, the firm’s customers trusted them and relied on their product guidance – that the customers came to my client’s firm, not to their vendor!

It was tough for the firm to let go of the vendor, as they really believed that their business would not be as successful without it. However, after one year without the difficult vendor, sales were down by 5%, but profits were up by 10%. On top of the improved financial considerations, the entrepreneur is sleeping better and just feeling much, much better. Now, in hindsight, the entrepreneur wonders why it took them so long to make this decision.

Some of the red flags indicating poor vendors are continuously unfulfilled orders, poor relationship with the vendor’s sales rep, questionable value in the products that they are distributing or manufacturing, and the feeling that you are just not getting the service that you require to service your customers. The key is to examine each and every one of your vendors to ensure that they are servicing you in the manner that your business requires.”

And let me add one thought here to those of Professor Osteryoung: don’t forget the positive, to tell your vendors and suppliers when they do a great job. Positive feedback, in my view, is probably an even more vital ingredient to building and sustaining a long-term relationship with solid vendors than criticism alone.

To reach Professor Osteryoung by e-mail, go to jostery@comcast.net. You can also contact him by phone at 850-644-3372. All of Dr. Osteryoung’s articles can be found in a searchable form at www.cob.fsu.edu/jmi.

So I just got back from the ninth annual fleet management conference put on by PHH FirstFleet, a third party vehicle management provider based out of Ft. Lauderdale, FL. (Incidentally, they just changed their name to PHH Trucks, to make the trucking aspect of their business crystal clear to their customers and the industry as a whole.)

I look forward to this event every year, despite being asked to speak at it (because I am just deathly afraid of speaking in public) because PHH Trucks brings in top-notch experts from across the industry to give the audience (made up of mostly private fleet managers) deeper insight into the business, regulatory, and equipment issues they will face today and especially tomorrow.

I already posted a story on our website about the engine panel PHH Trucks put together to go over the lessons learned for 2007 and what’s ahead for 2010. Richard Nelson, an engineer with the National Biodiesel Board, gave a truly excellent presentation called “The Good, The Bad, and The Ugly” concerning biodiesel’s use in commercial trucking, warning fleets that they must rigorous in determining the quality of both the biodiesel they use and the producer that makes it.

Mike Romaine from Eaton Corp. laid out the roadmap for hybrid vehicle development, telling the gathered fleet managers where Eaton thinks hybrids can be most advantageous in commercial use – which, frankly, is looking like everywhere as oil prices spike over $100 a barrel and diesel fuel nears $4 a gallon.

Jackie Yeager from Cummins talked about the California Air Resources Board (the infamous CARB) and the plan it’s drafting to force the replacement of older model trucks and buses in successive stages between 2010 and 2013. Following that effort is a proposal to start regulating carbon dioxide (CO2) emissions much the same way they’ve addressed particulates and oxides of nitrogen – for both California and out-of-state trucks that work in California.

I missed Dee Kapur’s outlook on truck manufacturing issues (expensive hotels like Hyatt should not have a third-rate, outside company run their business center computers for them, nor charge Internet fees when guests are shelling out $250 a night … but that’s another story), which is a bummer for Kapur, the president of the truck group for International Truck & Engine Corp., always has some interesting (if not controversial) things to say.

I did catch Rick Schweitzer’s talk about how states are eyeing more tolls and the sell-off of toll roads to third parties as a way to raise revenue. As legal counsel for the National Private Truck Council, Schweitzer also noted that the industry’s ongoing effort to get Congress to address commercial truck size and weight issues – an effort that could reduce the numbers of trucks needed to haul freight, while boosting overall trucking productivity – probably isn’t going anywhere anytime soon.

But by far the best presentation came from Jim Meil, Eaton’s chief economist, who once again used his insightful mix of economic analysis, uncomplicated language, and humor to give the assembled fleet managers a potential picture of the days ahead. Will there be a recession? Meil thinks not – but it’ll be a very “close call.” He believes the government has reacted in time, using a $165 billion in economic stimulus package combined with “bonus depreciation” for equipment bought by businesses this year. Also unheralded by most economy watchers is the strong ongoing boom in U.S. exports, up some 42% or $184 billion between 2006 and the end of 2007, which is helping balance out the 39.4% or $173.4 billion decline in housing starts.

That export boom is coming from strong economic growth in the rest of the world, particularly China, where the economy is literally expanding by 16% to 17% a year. That’s also translating into demand for new and used trucks, with Meil noting 15% of new trucks built in the U.S. are being exported – some 30,000 Class 8 units, compared to 3,000 units eight years ago. “We’re see used truck exports to Russia, South America, Nigeria, and Chile – a channel that literally didn’t exist several years ago,” he noted.

It helps, too, that the U.S. dollar is weak abroad, which is encouraging a lot of foreign purchases of U.S. goods as they can get more for their money. And with trucking so tied to manufacturing in this country, that’s a good bellwether for freight volumes in the months ahead. Meil also things that’ll help push Class 8 truck sales up to 240,000 units for the year.

This doesn’t mean the U.S. economy is in the clear – not be a long shot. If some big banks start failing from the subprime loan mess and oil prices climb up to $120 or $130 per barrel, that’ll spell real trouble. Demand for oil is exploding across the world, again with China in the lead, and that’s what will keep oil prices high for the foreseeable future.

“The freight worry here is that shippers are reacting to costly energy by cutting shipment weight,” he noted. “We’re also seeing a shift in freight from truckload to private carriers and more efforts to improve logistics efficiency to control costs. The bottom lime is that many tailwinds have turned to headwinds … but the trucking industry is resilient. And trucks still continue to be the major transportation mode, compared to available alternatives.”

Overall, Meil expects the economy to grow very slowly – “creep” might be a much better word – for the next few months, then ramp up toward the end of 2008. Anemic gross domestic product (GDP) growth of 0.6% in the fourth quarter in 2007 and 0.8% for the first quarter this year should shift up to 2.2%, 3.3%, and 3.5% for the remaining three quarters of 2008, averaging out to GDP growth of 2.1% for all of 2008. Not good numbers, but not too bad either, Meil said. “Those are not recession numbers,” he added. “We’re keeping our fingers crossed that in the end we’ll dodge a recession this year.”

Let’s just hope that scenario plays out in the end this year.